Category Archives: William Engdahl

For three days this month, June 16-18, I had the opportunity to participate as a panelist in the annual St. Petersburg International Economic Forum in Russia. I’ve been in Russia many times since the Ukraine US-backed coup d’état of February 2014, and the deliberate escalations of NATO military and economic tensions and sanctions against the Russian Federation. This year’s forum, my second as participant, gave me a rare opportunity to speak with leading representatives from every sector of the Russian economy- from CEOs of the energy sector to the Russian Railways to the national Russia Grid electricity provider to numerous small and mid-sized businessmen, to a wide range of economists. It sharpened my perception of just how precarious the situation of Russia today is.

What became clearer to me in the course of the three days of discussions in St Petersburg is precisely how vulnerable Russia is. Her Achilles Heel is the reigning ideology that controls every key economic post of the Government of the Russian Federation under Prime Minister Dmitry Medvedev. Under the terms of the Russian Constitution adopted in the chaos of the Yeltsin years and enormously influenced, if not literally drafted, by Russia’s foreign IMF advisers, economic policy is the portfolio responsibility of the Prime Minister and his various ministers of Economics, Finance and so forth. The Russian President, today Vladimir Putin, is responsible for defense and foreign policy.

Making the job virtually impossible of reviving credit flows to fuel genuine real investment in urgently needed infrastructure across the vast land expanse of Russia is the Central Bank of Russia. The Central Bank of Russia was given two constitutionally-mandated tasks when it was created as an entity independent from the Russian Government in the first months of the Russian Federation following the breakup of the Soviet Union. It must control Russian domestic inflation and it must stabilize the Ruble against major foreign currencies. Like western central banks, its role is almost purely monetary, not economic.

In June, 2015 as I participated the first time in the St Petersburg forum, the Russian Central Bank base rate, interest charged to banks, was 11%. In the peak of the so-called Ruble crisis in January 2015 it had reached 17%. Expectations last summer were that Elvira Nabiullina, the central bank governor since 2013, would begin to bring central rates rather rapidly down to manageable levels, especially at a time when central banks such as the European Central Bank, the US Fed and the Bank of Japan were lowest in some 500 years at zero or even negative. Further, since January 2016 oil prices, a significant factor in the Ruble strength as Russia is the world’s largest oil exporter, began a rise of more than 60% from lows below $30 a barrel in early January to levels near $50 six months later.

That lowering of rates by the Central Bank hasn’t happened. Instead it is slowly killing the economy. One year later, in early June, 2016 the Russian Central Bank under Governor Nabiullina made the first rate cut since June 2015…to a still-deadly 10.5%. Perhaps it’s notable that monetarist Nabiullina was named by the London Euromoney magazine as their 2015 Central Bank Governor of the Year. That should be seen as a bad omen for Russia. Equally ominous was the fulsome praise the head of Washington’s IMF had for Nabiullina’s monetarist handling of the early 2015 Ruble crisis.

After gifting the French an early Christmas this year, to sweeten the deal from total prostitution of the state apparatus, the German and American generosity has extended to Ukraine in more ways than one.

This is worse than deconstructing a country. They are being enlisted in the 4th reich at the same time. These “parliamentarians” are among the ones who will make laws for the state.

This can be considered America’s Christmas gift to the Russian people really.

AE
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If it were not for the fact that the lives of some 45 million people are at stake, Ukrainian national politics could be laughed off as a very sick joke. Any pretenses that the October national elections would bring a semblance of genuine democracy of the sort thousands of ordinary Ukrainians demonstrated for on Maidan Square just one year ago vanished with the announcement by Victoria Nuland’s darling Prime Minister, “Yat” Yatsenyuk, of his new cabinet.

The US-picked Ukraine President, billionaire oligarch Petro Poroshenko called “snap” elections at the end of August for October 26. He did so to make sure genuine opposition to his regime of murderers, gangsters and in some cases outright Nazis would be able to push an unprepared genuine opposition out of the Verkhovna Rada or Parliament. Because the parliament had significant opposition parties to the US-engineered February 22 coup d’Etat, they had blocked many key pieces of legislation that the Western vultures were demanding, from changing key land ownership laws to privatization of precious state assets. By law, the old parliament would have sat until its five year term ended in October, 2017. That was clearly too long for State Department neo-con Ukraine puppet-mistress Victoria Nuland and her backers in Washington.

Now, with a new parliament that is controlled by the Petro Poroshenko bloc as largest party and the boyish-looking former Prime Minister Arseniy Yatsenyuk, who is also new Prime Minister as head of the second largest party, the way was clear to get on with the rape of Ukraine. What shocked some is the blatant foreign takeover that followed, like a Wall Street vulture fund raid on a distressed debtor country of the Third World.

South Stream, the $45 billion project to deliver Russian natural gas via underwater pipeline through the Black Sea to Bulgaria and on to other Balkan and southern European markets, is dead. Russian President Vladimir Putin made the death pronouncement on December 1, during a trip to Turkey to meet Turkish President, Recep Tayyip Erdogan. It has major geopolitical and economic consequences for the EU.

As Putin explained, “If Europe doesn’t want to realize this, then it means it won’t be realized. We will redirect the flow of our energy resources to other regions of the world. We couldn’t get necessary permissions from Bulgaria, so we cannot continue with the project. We can’t make all the investment just to be stopped at the Bulgarian border,” Putin said. “Of course, this is the choice of our friends inEurope.”

The Russian President didn’t waste a minute to show how he plans that redirection. The real loser is not Russia, but the EU who managed yet again to shoot themselves in the foot by their buckling under to Washington pressure from Victoria Nuland’s State Department and the Obama Administration hawks. The South Stream would have provided secure delivery to southern EU countries including Bulgaria, Hungary, Austria, Italy, Croatia and also Serbia. It would avoid the current transit pipelines running through Ukraine. Similarly, to avoid a repeat of the US-induced Ukrainian disruptions of Russian gas to the EU in 2009, Russia and Germany agreed the construction of Nord Stream, also avoiding Ukraine.

(William Engdahl – NEO) – By now even the New York Times is openly talking about the secret Obama Administration strategy of trying to bankrupt Russia by using its oil-bloated Bedouin bosom buddy, Saudi Arabia, to collapse the world price of oil. However, it’s beginning to look like the neo-conservative Russia-haters and Cold war wanna-be hawks around Barack Obama may have just shot themselves in their oily foot. As I referred to it in an earlier article, their oil price strategy is basically stupid. Stupid, as all consequences have not been taken into account. Take now the impact on US oil production as prices plummet.

The collapse in US oil prices since September may very soon collapse the US shale oil bubble and tear away the illusion that the United States will surpass Saudi Arabia and Russia as the world’s largest oil producer. That illusion, fostered by faked resource estimates issued by the US Department of Energy, has been a lynchpin of Obama geopolitical strategy.

Now the financial Ponzi scheme behind the increase of US domestic oil output the past several years is about to evaporate in a cloud of fictitious smoke. The basic economics of shale oil production are being ravaged by the 23% oil price drop since John Kerry and Saudi King Abdullah had their secret meeting near the Red Sea in early September to agree on the Saudi oil price war against Russia.